## Tax Potential in North Macedonia

_Selected Issues Papers, June 22, 2026_

## Source details

**Canonical URL:** [Tax Potential in North Macedonia](https://www.imf.org/en/publications/selected-issues-papers/issues/2026/06/22/tax-potential-in-north-macedonia-577143)

## Other formats

- [Markdown version](/en/publications/selected-issues-papers/issues/2026/06/22/tax-potential-in-north-macedonia-577143/index.md)
- [Structured JSON version](/en/publications/selected-issues-papers/issues/2026/06/22/tax-potential-in-north-macedonia-577143/index.json)
- [Bundle manifest](/en/publications/selected-issues-papers/issues/2026/06/22/tax-potential-in-north-macedonia-577143/bundle-manifest.json)

## Bibliographic details
- Authors: Yuan Xiao, Faton Sulejmani, Anamaria Maftei
- Published: June 22, 2026
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229050135.018

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### Overview and main finding
- The paper assesses North Macedonia’s tax potential and reform options to support fiscal consolidation and create space for rising long-term spending pressures.
- Tax revenue remains the lowest in the region, reflecting low statutory rates, extensive tax expenditures, weak tax efficiency, and a sizable informal economy.
- Using a stochastic frontier model for 154 countries, the paper estimates tax potential at about 21 percent of GDP, implying a tax gap of around 3½ percent of GDP.

### Methodology and scope
- Empirical approach: stochastic frontier model applied to 154 countries.
- Coverage: analysis focused on tax potential and reform options for North Macedonia.
- Publication specifics:
  - Pages: 14
  - Volume: 2026
  - Issue: 049
  - Series: Selected Issues Paper No. 2026/049
  - DOI: https://doi.org/10.5089/9798229050135.018
  - Stock No: SIPEA2026049
  - ISBN: 9798229050135
  - ISSN: 2958-7875
- Authorship and date:
  - By Yuan Xiao, Faton Sulejmani, Anamaria Maftei
  - June 22, 2026

### Key policy recommendations
- VAT base broadening.
- Rationalized CIT incentives.
- More progressive PIT.
- Higher environmental and health excises.
- Stronger property taxation.
- Improved tax administration.

### Subject classifications and keywords
- Subject: Expenditure, Fiscal policy, Revenue administration, Revenue mobilization, Revenue performance assessment, Tax gap, Taxes, Value-added tax
- Keywords: Domestic Revenue Mobilization, Global, IMF country, IMF staff, issues paper, Middle East, North Macedonia, paper estimate, Revenue mobilization, tax expenditure, Tax Gap, Tax Potential, Value-added tax

*Source: IMF Selected Issues Papers — "Tax Potential in North Macedonia" by Yuan Xiao, Faton Sulejmani, and Anamaria Maftei (June 22, 2026).*

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## Content in this bundle

- **Tax Potential in North Macedonia; IMF Selected Issues Paper No. 2026/049; May 12, 2026**
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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2026/06/22/tax-potential-in-north-macedonia-577143_